News summary in November 2016.
Oil and Gas
04/11/2016 – Small and medium-sized oil companies are investing again in Brazil
Improved expectations regarding the Brazilian economy, the stabilization of the political situation, the government’s new agenda for the oil sector and the sale of Petrobras’ assets are stimulating the participation of smaller domestic and foreign oil companies in the Brazilian market. It is the case of Letter One Energy, with head office in Luxembourg, and which chairman of the board of directors is Lord Browne, who was the global chief executive of the British energy company BP between 1995 and 2007. The objective of the company is that Brazil corresponds to 25% of its portfolio in the future.
10/11/2016 – Shell’s Chief Executive announces US$ 10 billion investment in Brazil
The global Chief Executive of the Anglo-Dutch oil company Shell, Ben van Beurden, announced this Thursday (10/11), after a session with President Michel Temer in Palácio do Planalto, that the company will invest US$ 10 billion in Brazil over the next four years. The chief executive explained to journalists at the end of the meeting with President Temer that the investment will be made, primarily, in projects associated with Petrobras on the exploitation of oil on the pre-salt. For the chief executive, with the changes in the pre-salt regulations, the country moves to the right direction. Under Ben van Beurden evaluation, the new law will allow new companies to enter the Brazilian Market and opens opportunities to Shell.
22/11/2016 – ANP bid in 2017 should exclude local content for oil
Reason for clash between Brazilian supply industry and oil companies, local content requirement should be excluded from the next bid to be carried out by the National Oil Agency (ANP) – the 4th round of marginal areas, scheduled for 2017, with no defined date. The agency is waiting for the government position until 13 December on the requirement to purchase minimum volume of products and services in Brazil. The only certainty is that the local content requirement will not be a criterion for defining the winner. The question is if any incentive policy to the national industry will be foreseen in the bid rules. The decision will be of the National Council for Energy Policy (CNPE), that has a meeting scheduled on 8 December. Chaired by the Minister of Energy, Fernando Coelho Filho, the Council will evaluate a number of changes in the oil sector which should make the rules for operating in the country more flexible and should facilitate the attraction of investors. A new local content policy, more favourable to oil companies, which demand freedom on the import of goods, is on the agenda.
23/11/2016 – Petrobras closed deal on pre-salt and receives US$ 1.25 bi for the 1st part of the deal
Petrobras informed that it closed on Tuesday (22/11) the sale of its 66% participation on the exploration block BM-S-8 to Statoil Brasil Óleo e Gás, unit of the Norwegian company Statoil. The transaction was closed with the payment, made this Tuesday, of US$ 1.25 billion, corresponding to 50% of the total value of the transaction. On BM-S-8, in Santos bay, is the promising Carcará oil field. Negotiation with Statoil marked the sale by Petrobras of the first great area of pre-salt included in the disinvestment plan of the state-controlled company, which aims at collaborating with the debt reduction programme of the company. The remaining amount will be paid by means of contingent instalments related to subsequent events, such as the conclusion of a Production Individualization Agreement (unitisation).
30/11/2016 – Temer sanctions law that releases Petrobras from the obligation of operating on the pre-salt
Under the promise from foreign oil companies to increase investments in the country, President Michel Temer sanctioned this Tuesday (29/11) the law which removes from Petrobras the obligation to be the sole operator on pre-salt. During the ceremony held in the Palácio do Planalto, Temer said that the measure is in favour of the country, as it will allow more investments to be made in the oil sector and, thus, generate more jobs. In the ceremony, this Tuesday, oil companies that were present in the event, especially those with activities in the country, celebrated the measure and promised the government to increase investments once the new regulation is implemented as pleaded by them. Also in the ceremony, the government announced the renewal for another 20 years of REPETRO, the programme that gives tax incentives on the purchase of equipment for the oil industry abroad and in the country.
03/11/2016 – Large oil companies join forces to create renewable energy fund
Large oil companies, like Saudi Aramco and Shell, are joining forces to create an investment fund to develop renewable energy technologies, seeking to play an active role in combating global warming, according to Reuters. The sector faces increasing pressures to take a more prominent role in the fight against global warming, and the event on Friday (04/11) will coincide with the formal entry into force of the 2015 Paris Agreement, which aims to gradually reduce greenhouse effects in the second half of the century.
03/11/2016 – Commission approves credit line for renewable energy projects
The External Financing Committee (Cofiex), coordinated by the Ministry of Planning, for renewable energy projects and micro, small and medium-sized enterprises innovation in the total value of up to US$ 900 million, the government said on Thursday (03/11). According to the Ministry of Planning, it was only the first step to make the credit line viable, which still has to undergo the National Treasury’s analysis and then be approved by the National Congress.
According to the Ministry of Planning, US$ 750 million from the Inter-American Development Bank (IDB) will be transferred to companies through the National Bank for Economic and Social Development (BNDES). In addition to the US$ 750 million, the credit line will also count on up to US$ 150 million from BNDES – an amount that will be added to the IDB portion – totalling up to US $ 900 million in credit.
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